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Massachusetts sues Ocwen over mortgage servicing practices

BOSTON, April 28 (Reuters) - The Massachusetts attorney general sued a unit of Ocwen Financial Corp on Friday, accusing the mortgage servicing company of engaging in abusive practices that harmed thousands of homeowners in the state.

The lawsuit, filed in Suffolk County Superior Court, came a week after the U.S. Consumer Financial Protection Bureau, the Florida attorney general and more than 20 state banking regulators took action against Ocwen.

"It is alarming that one of the nation's largest mortgage loan servicers has proven itself to be incapable of properly handling homeowners' mortgages in Massachusetts," Healey said in a statement.

Ocwen, one of the United States' largest nonbank mortgage servicers, in a statement said that it was reviewing the matter and intended to vigorously defend itself.

The lawsuit followed a similar case brought by the CFPB on April 20, accusing Ocwen of widespread misconduct in how it serviced borrowers' loans, from foreclosure abuses to a basic failure to send accurate monthly statements.

CFPB officials said Ocwen and its subsidiaries have failed to clean up their act, even after reaching a settlement with the agency and states in 2013 to provide $2.1 billion in relief to harmed borrowers because of similar violations.

The CFPB's lawsuit was filed as more than 20 state banking regulators, including the Massachusetts Division of Banks, issued orders or charges to subsidiaries of Ocwen to address violations of state and federal laws.

Ocwen on Wednesday filed a legal challenge to the CFPB that argued the agency was not legal under the U.S. constitution. Ocwen has also filed lawsuits to block the actions by the Massachusetts and Illinois banking regulators. (Reporting by Nate Raymond in Boston; Editing by Leslie Adler)